Stock Market Does Better with Democratic Presidents

An examination by Bloomberg showed that a hypothetical investment of $1,000 in Standard & Poor’s stocks in 1961, the year John F. Kennedy was inaugurated as president, and kept in stocks only when Democrats occupied the White House, would be worth $10,920 today. On the other hand, $1,000 invested the same way in 1973, the year the next Republican, Richard Nixon, was inaugurated, would only have been worth $2,087 on the day George W. Bush vacated the Oval Office.

If the same $1,000 had been made in Dow Jones stocks, the difference would have been $7,550 to $2,716.

“The market does tend to do better under Democrats than under Republicans,” Sam Stovall, chief investment strategist at S&P Equity Research in New York, told Bloomberg. “Is it because Republicans mishandled the economy, or inherited a weak economy? I’ll leave that to others.”

Bob Drummond of Bloomberg notes that Republicans may be at a disadvantage since every single GOP president since World War II has faced a recession during his first term.

A previous study published at buysellshort.net demonstrated that between 1897 and 2008 the Dow went up 7,863 points under Democratic presidents, but only 1,032 points under Republicans. Given this long history, some have speculated that Democrats have a better track record of funding government programs that stimulate the economy.